Short Abstract:

Sen's theory of human developmen has influenced the UN's approach and led to the establishment of organizations like the HDCA. Sustainable development, particularly in response to climate change, requires ecological tax reforms to transition to a green economy. The Capabilities Approach could inform the restructuring of tax systems to address environmental and social harms more effectively.

Long Abstract:

Amartya Sen's theory has significantly underpinned the United Nations' approach to human development. This is evident through the examination of the United Nations Human Development Reports, which conceptualize development as the process of broadening human choices. The significance of Amartya Sen's contributions to these multidimensional approaches is unmistakable as his theory serves as a foundational framework supporting various others and has been instrumental in the establishment of an organization dedicated to the study of human development - the Human Development and Capability Association, of which Amartya Sen is one of the founding members (DIB, 2001, p. 97). The concept that development aims to enhance human lives by broadening their capabilities was deeply fostered by Amartya Sen. He stated that "development is about removing the obstacles to what a person can do in life, obstacles such as illiteracy, ill health, lack of access to resources, or lack of civil and political freedoms" (FUKUDA-PARR, 2003, p. 303). Sen argues that the proposed theory advocates for development as a process of expanding substantial freedoms, contrasting with theories that limit the scope of development by focusing solely on income growth, maximizing well-being, or industrial and technological progress (SEN, 1999). The impacts of climate change are becoming more tangible and are impacting every corner of the globe, pushing it towards a threshold where the harm to humanity's existence could become extremely serious and irreversible. In this context, the aim is to explore sustainable development from the taxation activity from a hypothetical-deductive method, adopted in a theoretical research based on literature review. We observe that the pursuit of sustainable economic development demands the implementation of ecological tax reforms aimed at fostering the transition to a green economy - if adopted correctly, steering taxation is a powerful public policy that may direct the taxpayers’ choices towards greener consumption and attitudes and restrain polluting actions. However, efforts to mitigate the effects of climate change on well-being may clash with many contemporary approaches to achieving well-being, which still heavily rely on fossil fuel-derived energy (VILLANI; VISCOLO, 2020). Yet, these changes call for alterations in production processes, consumption patterns, and lifestyles – as well as intense public debate among lawmakers and, most importantly, involving citizens, institutions, and economic groups, so as to conscientize the most relevant players in domestic and global scale. Ultimately, these variations could impact certain economic sectors and socially vulnerable groups heavily reliant on energy, such as households facing financial constraints or sudden economic, social, or health challenges, hindering their ability to afford necessities, including energy utilities. On the other hand, human well-being relies on the mitigation of climate changes, more urgently and decisively and ever. We conclude that the Capabilities Approach could serve as foundation for rethinking national tax systems with the aim of eradicating or diminishing greenhouse gas emissions and its externalities stemming from the rise in greenhouse gas concentration in the atmosphere, as the existing tax rates on polluting goods are remarkably low and fail to adequately mirror the environmental and social harm caused by these products.